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CIRCULAR No. 34/2004/TT-BTC OF APRIL 19, 2004 GUIDING THE RETROSPECTIVE COLLECTION OF TAXES, FINE AND COLLEC-TION OF SURCHARGE ON AUTOMOBILES IMPORTED IN CONTRAVENTION OF REGULATIONS

Pursuant to the Export Tax and Import Tax Law of December 26, 1991, and the July 5, 1993 Law and Law No. 04/1998/QH10 of May 20, 1998 Amending and Supplementing a Number of Articles of the Export Tax and Import Tax Law;

Pursuant to the Government's Decrees No. 54/CP of August 28, 1993 and No. 94/1998/ND-CP of November 17, 1998 detailing the implementation of a number of articles of the Export Tax and Import Tax Law and the Laws Amending and Supplementing a Number of Articles of the Export Tax and Import Tax Law;

Pursuant to the directing opinions of the Prime Minister in the Government Office's Official Dispatches No. 2752/VPCP-KTTH of May 23, 2002; No. 5372/VPCP-KTTH of September 27, 2002; No. 1169/VPCP-KTTH of March 17, 2003 and No. 183/VPCP-KTTH of January 12, 2003 on the handling of automobiles imported in contravention of regulations;

After consulting with the Ministry of Public Security, the Ministry of Trade and the Ministry of Transport, the Ministry of Finance hereby guides the confiscation, retrospective collection of taxes, sanctioning and collection of surcharge on automobiles imported in contravention of regulations as follows:

I. GENERAL PROVISIONS

1. Automobiles subject to confiscation, collection of tax arrears, fines and surcharge:

Various kinds of "covered trucks of tourist car type models," imported during the period from May 1, 2001 (the effective date of the Prime Minister's Decision No. 46/2001/QD-TTg of April 4, 2001) to April 26, 2002 (the date the General Department of Customs signed Official Dispatch No. 1863/TCHQ-GSQL guiding the cessation of procedures for importing the above-said kinds of automobiles according to the Trade Ministry's Official Dispatch No. 0580/TM-XNK of April 18, 2002), excluding those imported by the Ministry of Public Security and the Ministry of Defense for special use in carrying troops or to be fitted with professional equipment in service of working or combat, including the following brands and marks:

+ Korando Sangyong; Korando Daewoo.

+ Huyndai Galloper Innovation; Huyndai Galloper II

+ Huyndai Starex 3 van

+ Huyndai Starex 6 van

+ Kia Carnival 6 van

+ Huyndai Grace

+ Huyandai Istana

+ Daewoo Damas

+ And covered trucks of tourist car type models of other brands and marks.

2. Payers and amounts to be retrospectively collected:

- Units and individuals that import vehicle types mentioned at Point 1, Section I of this Circular are subject to retrospective collection of import tax and special consumption tax according to the provisions of the Export Tax and Import Tax Law; the Special Consumption Tax Law; and shall be sanctioned for administrative violations in tax domain according to regulations at the time of violation commission.

- Units and individuals that use vehicles of the types mentioned at Point 1, Section I of this Circular, and have been granted registration certificates for circulation of trucks or semi-trucks and permitted by competent agencies to convert their trucks or semi-trucks into passenger vehicles, shall have to pay a surcharge according to the provisions of Point 2, Section II of this Circular.

3. Handling of confiscated vehicles: Covered trucks illegally imported into Vietnam mentioned at Point 1 above (including those imported into Vietnam after this time) and having not yet gone through customs clearance procedures shall not be subject to the retrospective tax collection guided in this Circular but shall be confiscated. Police and customs offices shall consult each other and report to the provincial/municipal People's Committees for issuance of confiscation decisions and handling of confiscated goods according to current regulations.

II. METHODS OF DETERMINING AMOUNTS TO BE RETROSPECTIVELY COLLECTED, FINES FOR VIOLATIONS AND SURCHARGE

1. Import tax and special consumption tax:

Import tax Import tax Import tax or

or special or special special

consumption consumption consumption

tax amount = tax amount - tax amount

to be determined to be paid

retrospectively according to according to the

collected passenger notice of the

vehicles customs office

(a) (b) (c)

In which:

b: Import tax or special consumption tax amount determined according to passenger vehicles on the following bases:

- Quantity of imported vehicles subject to the retrospective collection according to Point 1, Section I of this Circular.

- Tax rates: Applicable are import tax or special consumption tax rates prescribed for passenger vehicles (passenger vehicles equivalent to imported vehicles in model, size, tonnage and number of seats, which are determined on the basis of the manufacturers' standards) at the time of submission of import goods declarations by units and individuals to the customs offices.

- Tax calculation prices: Applicable are the minimum tax calculation prices prescribed by the Customs General Department for passenger vehicles at the time of submission of import goods declarations by units and individuals to the customs offices.

c: Import tax or special consumption tax amount notified by the customs office at the time of carrying out the import procedures.

2. Surcharge:

For imported automobiles mentioned at Point 1, Section I of this Circular, which have been granted registration certificates for circulation as trucks (or passenger-cum-cargo vehicles) and permitted by functional agencies to be converted into passenger vehicles within 5 years (60 months) as from the month when the first circulation registration certificate was granted, a fixed surcharge of VND 20,000,000/vehicle (twenty million dong per vehicle) must be paid. If the period from the time of first circulation registration to the time of conversion into passenger vehicles exceed 5 years, the said surcharge shall not be paid. All cases of conversion without permission of functional agencies shall be administratively handled according to the provisions of Clauses 5 and 10, Article 20 of the Government's Decree No. 15/2003/ND-CP of February 19, 2003 prescribing the handling of administrative violations in road traffic, or Clauses 3 and 5, Article 17 of the Government's Decree No. 39/2001/ND-CP of July 13, 2001 (already replaced by above-said Decree No. 15/2003/ND-CP), depending on the time of violation commission.

3. Sanctioning of violations:

The customs offices shall base themselves on the Government's Decree No. 100/2004/ND-CP of February 25, 2004 prescribing the sanctioning of administrative violations in tax domain and guiding documents to sanction the importers' administrative violations in tax domain.

III. ORGANIZATIONS OF IMPLEMENTATION

1. Agencies carrying out the retrospective collection or imposing administrative sanctions:

- The local Customs Departments shall calculate and notify the retrospective collection to cases subject to retrospective collection of import tax and special consumption tax. The time limit for retrospective payment of tax amounts shall comply with Section III, Part C of the Finance Ministry's Circular No. 172/1998/TT-BTC of December 22, 1998 and the current regulations. Depending on the seriousness of violations, decisions on sanctioning administrative violations in tax domain shall be issued according to current regulations.

- The Tax Departments of the provinces and centrally-run cities shall have to guide the declaration and receive declarations for surcharge payment, made by organizations and individuals liable to pay surcharge according to the set form (not printed herein). The directors of the provincial/municipal Tax Departments shall issue notices on surcharge collection (according to the set form, not printed herein), so that the liable units and individuals pay surcharge into the State Treasury.

- The State Treasury offices in the provinces and centrally-run cities shall base themselves on notices on tax arrear collection or surcharge collection of the customs offices and tax offices to collect such amounts and hand payment vouchers to the paying organizations or individuals.

- The police offices shall permit the conversion of registrations of trucks into passenger vehicles only when vehicle owners can produce surcharge collection notices of tax agencies and surcharge payment vouchers issued by the State Treasury.

- The People's Committees of the provinces and centrally-run cities; the ministries, ministerial-level agencies and Government-attached agencies shall direct their attached units in notifying this Circular's content to units and individuals subject to the tax arrear collection and/or surcharge collection and sanction for their violations for implementation.

- Agencies carrying out the tax arrear collection, surcharge and fine collection shall create favorable conditions for and must not cause troubles to tax arrears and surcharge payers.

2. For retrospective collection-liable subjects:

- Organizations and individuals that import vehicles of the types mentioned at Point 1, Section I of this Circular shall contact the customs offices of localities where the vehicles are imported to determine retrospectively collected amounts and administrative violation fines, receive tax payment notices and decisions on sanctioning administrative violations in tax domain (if any). Organizations and individuals shall have to fully pay retrospectively collected tax and fine amounts (if any) according to the customs office's notices.

- For surcharge amounts: Organizations and individuals that use vehicles of the types mentioned at Point 1, Section I of this Circular, which have been converted into passenger vehicles, shall have to make declarations for surcharge payment according to the guidance at Point 2, Section II of this Circular. Units and individuals shall declare and pay the surcharge for converted vehicles according to the set form (not printed herein), submit registrations to the Tax Departments of localities where they reside or their offices are registered, receive notices and pay the surcharge (VND 20,000,000/vehicle) into the provincial/municipal State Treasury offices according to the surcharge collection notices of the tax offices.

- Retrospective collection-liable subjects shall have to pay fully and on time tax amounts notified by the customs offices and retrospectively collected amounts (including surcharge amounts, if any) according to the additional notices of the customs offices and tax offices.

3. Time limit for declaration and payment:

- By June 30, 2004 at the latest, organizations and individuals subject to the tax arrear collection and surcharge payment must present themselves at the agencies carrying out the retrospective collection (defined at Point 1, Section III of this Circular) to declare and pay the payable amounts.

- Units and individuals subject to the tax arrear collection, sanction for administrative violations in the tax domain and surcharge collection shall have to remit payable amounts into the State Treasury according to the time limits stated in the notices of the customs offices and tax offices. If they delay the payment, they shall be fined for delayed payment according to regulations.

4. Reporting and inspection:

- Retrospectively collected import tax and special consumption tax; fine and surcharge amounts shall be wholly remitted into the State Budget according to the current State Budget Index. The State Treasury offices in the provinces and centrally-run cities shall have to monitor the above-said collection amounts.

- Upon expiry of the time limit for the collection of tax arrears, fine and surcharge, the collecting units shall organize the collection and make lists with details in quantities, types, frame and engine serial numbers of vehicles; serial numbers of origin declarations and import declarations; names and addresses of importing units/individuals; amounts to be retrospectively collected, etc., (according the set form, not printed herein), then send them to the Finance Ministry (the General Department of Customs) for monitoring.

5. Handling of violations:

- Past the said time limit, if detecting any vehicles already converted into passenger vehicles subject to the surcharge collection, for which declarations for surcharge payment have not yet been made, the police offices shall temporarily not permit the circulation thereof. These vehicles, apart from being suspended from circulation, shall be imposed with a delayed payment fine equal to 0.1% of the total payable surcharge amount for each day counting from the expiry of the declaration time limit prescribed at Point 3, Part C above (June 30, 2004).

- Past the declaration time limit (June 30, 2004), if organizations and individuals subject to import tax and special consumption tax arrear collection and violation fines (if any) still fail to make registrations and declarations with the customs offices and tax offices, they shall not be allowed to register for circulation of their vehicles. In cases where they have already registered and declared for retrospective payment but fail to pay within the time limit stated in the notices of the customs offices and tax offices, the agencies which have issued retrospective collection or sanctioning decisions may apply measures as to cases of delayed tax and fine payment in the import stage.

6. For various kinds of "covered trucks of tourist car type models" imported during the period from January 1, 1999 to April 30, 2001, the retrospective collection shall comply with the Prime Minister's directing opinions in the Government Office's Official Dispatch No. 806/CP-VI of July 16, 1998, the Customs General Department's Official Dispatches No. 2813/TCHQ-KTTH of August 14, 1998 and No. 6065/TCHQ-KTTH of December 28, 2000 and relevant guiding documents.

This Circular takes effect 15 days after its publication in the Official Gazette. Any problems arising in the course of implementation should be reported by the concerned units to the Finance Ministry for timely solution.

For the Minister of Finance

Vice Minister
TRUONG CHI TRUNG